Helping Your Aging Parents with Their Finances

Our parents were financially responsible for us in the beginning of our lives. As our parents age, there may come a point when we need to return the favor and help them with their finances.

Your parents may ask for help, or they may not. But taking the steps now to get them comfortable with your help is the better route than waiting until something goes wrong.

Start a conversation early

If possible, opening the lines of communication early is best. Start by asking to be included in their finances or offer assistance, rather than initiating a complete takeover. “Mom, do you have an accountant? Can I have their contact information? I’d like to introduce myself.” “Dad, are you still writing checks? I can show you how to set up automatic payments if you’d like. It’s more secure.”

Explain that you want to get a good understanding of their long-term plans so you’re prepared to help out if the time comes.

Review their records with them

Ask them to prepare a list of the banks, lenders, and other financial institutions that they have accounts with. (Help them if they need it.)

Once the information is easily accessible, ask to sit down and go over everything together. Wills and life insurance policies are especially important to make sure they are still set up in accordance with their wishes.

Are there income streams coming in via checks? Help them switch to direct deposits since this is a safer method. The same goes will any bills that can be automated. Making these changes can also ensure money makes it into their accounts, and debts are paid even if a problem emerges where they are not able (or remember) to.

Kindly request they give you access to these accounts so you can continue to review and monitor them. If problems arise, you’ll be able to recognize them.

Consider setting up legal documents

If they don’t yet have a will and are still of sound mind, encourage your parents to check this off the list. Wills can be easily created online. If they are not computer-savvy, offer to walk through the process with them.

Two other important documents for your parents are a durable power of attorney and healthcare power of attorney. Both of these documents enable an agent to make decisions on your parents’ behalf if they were unable to.

The older your parents are, the more important it is for them to name power of attorney agents. Once an individual becomes incapacitated (e.g. dementia or a coma) it’s too late to create power of attorney. These documents need to be created and validated beforehand.

The durable power of attorney allows you to make financial decisions. The healthcare power of attorney (also known as a healthcare proxy) enables you to make medical decisions and be informed of their medical status without doctors violating HIPAA laws.

The durable power of attorney and healthcare power of attorney can name the same agent or two different individuals. If you have siblings, maybe one of you is more financially-savvy than the other. This person may be best for the durable power of attorney. Maybe one lets their emotions take over when it comes to health issues. This person may not be a great choice for the healthcare power of attorney.

Keep your siblings in the loop

If you’re thinking about helping your parents manage their finances, your siblings may be as well. If you and your siblings are both talking to your parents separately about finances, your parents may get a little frustrated. It can be hard for some aging adults to give up that control. Being interrogated from multiple directions may cause them to shut it down and reject any help.

Before starting these conversations with your parents, bring it up to your siblings first so you’re all on the same page. You don’t want your siblings to think you’re going behind their back dealing with mom and dad’s finances either.

Recognizing Cognitive Impairment

Not everyone develops cognitive issues when they age. But having these discussions and plans in place can lessen future frustrations and legal hoops to jump through if the time comes when your parents need help.

So, when is it time for you to start the decision-making? If cognitive issues are at play, a parent may not even realize when they can no longer manage their financial situation.

If you’re starting to notice instances of memory loss or confusion in one or both of your parents, more direct actions may need to be taken. Look for these signs:

• Piles of unopened mail. Are bills being paid late or not at all? Are there letters from collection companies?
• Unusual purchases. Are you noticing things around their home that don’t fit their needs or lifestyle? Are there sweepstakes mailings lying around? Spending their money on things they don’t need can spiral out of control quickly, and older people are often vulnerable to scams.
• Disheveled appearance. Does your parent’s hair look messy when it’s usually neat? Are clothes mismatched, dirty, or not on par with the weather?
• Unclean or cluttered house. Has the house typically been tidy and now it’s not? Do things seem disorganized? This may be a sign of memory problems or issues like physically not being able to maintain a house any longer.
• Confusing family members. Calling you by your sibling’s name or calling their spouse by their child’s name can sometimes just be chalked up to old age. But if they’re doing it regularly or not acknowledging their mistake, this can be a sign of more serious memory issues.

If you need help with your aging parents, the National Alliance for Caregiving has support programs and resources. They’re dedicated to improving quality of life for friend and family caregivers and those in their care.